Explaining New England's Export Performance: 1987 to 1993

The recession of the early 1990s hit New England much harder than
the nation. Presumably, thus, New England firms are highly motivated
to seek rapidly growing markets wherever they may be--including
overseas. During the 1990-91 downturn, real net exports cut the depth
of the U.S. recession by half. Looking ahead, moreover, recent forecasts
by the International Monetary Fund suggest that world growth will
outpace U.S. growth in 1995. Despite New Englanders' obvious incentive
to explore burgeoning foreign markets, however, the best available
data indicate that the region underperformed the nation in terms of
export growth from 1987 to 1993.

This article explores the reasons for the region's below-average
merchandise export growth and concludes that it largely reflects the
relative importance of the regional computer industry and its recent
structural problems, not a pervasive "exporting problem." Also contributing
are New England exporters' traditional ties to markets in mature
industrial countries, such as Atlantic Rim countries, which suffered
severe recessions from 1990 to 1993. As the authors point out, however,
merchandise exports represent only one route to foreign consumers.
New Englanders are also reaching vibrant foreign markets, such as Asia
or Latin America, through exports of services and through sales made
by foreign affiliates of New England firms. The ongoing restructuring of
the regional economy suggests that these alternative paths are likely to
become increasingly important over time.